Company Earnings

Northern Advocate, 27 May 1941, Page 9

Company Earnings

The allowance to distributors in Auckland City up to April 30, 1941, had been 11/16d per lb., and for all other centres 8/16d had been allowed by the Marketing Department. From April 30, 1941, the Minister for Marketing had stated that 8/16d would also apply to Auckland City. The company earnings naturally would be confined principally to distribution, possible savings in special allowances regarding the. patting of bulk butter at 1/6 per box and pool savings in connection with containers of about 6d per box. Possibly 8 per cent, of distribution gross profit would be absorbed in operating expenses and administration costs.

That being so it would appear approximately .<COSd per lb. of manufacture would be the additional income that a factory with no local sales market connection might hope to receive from the Auckland City sales, said Mr. Tremaine.

Pool Earnings In order to secure this bonus from the city, factories which were at present earning a larger unit profit from local district sales must be prepared to pool their present earnings if it were desired to be in a fortunate position when the time should come that the industry was once more given the unrestricted right to supervise the local marketing of its butter. It would then have an organisation in existence equipped and ready to function at a moment’s notice.

A full meeting of the committee had been held on March 31 to consider the Minister for Marketing’s letter of March 18 regarding questions asked by the committee during an interview in Hamilton on March 10. Difficulties To Be Considered “The nigger in the woodpile confronts your committee from two viewpoints as requested by the Minister,” said Mr. Tremaine. “They are: (1) That the committee succeeded in coming to a voluntary agreement with the existing Auckland City distributors 1 ' for their retirement with compensation payable on a reasonable basis. It was agreed by the committee that the position was too difficult to accept responsibility, but it would be prepared to meet the distributors. “ (2) ‘ln connection with the butter patting plant now operated by my department in Auckland, I have decided, after due consideration, that in the event of your proposed company assuming the Auckland City distribution, the best basis would be secured by an agreement whereby the Internal Marketing Department agreed to pat under contract for the company 50 per cent, of the butter supplies required for the Auckland Metropolitan area. To Meet Minister “The committee could not accept this suggestion, but indicated its strong preference to lease the floor of the departments’s new building and acquire its butter factory plant.”

It had been resolved that the best method of replying to the Minister’s letter was that a committee should be appointed to meet the Minister and further discuss the matter with him, and that the committee should also negotiate with the producers, continued 1 Mr. Tremaine.

Messrs. W. Marshall, E. G. Appleton and J. L. Faulkner had been appointed as the committee.

Statistical Position Statistical details were: Price Differentials F.oJd. Bulk Ist grade to pats— Local market returns .. .. 16.50 d Deduct Patting Extras— Distribution .. ,500 d Grading and Freezing .. ,050 d Rail to depot . ,018 d Wrappers .. .093 d Labour .. .. .250 d • ' .911 d 15.589 d

Add Butter Savings— Grading 018 d Storage and Freezing .. .183 d Parchment . .024 d Labour 058 d .283 d 15.872 d Deduct differential retained by Dept/ to bring local sale returns in line with export parity: .955 d, 14.917 d, equals £200,000 per annum. Guaranteed Price, 14.8904. Apparent profit on patting, 0.27 d. per lb.